In June, new home sales went up from the record low they were in May. Ever since the end of the homebuyers tax credit, new home sales have gone down a lot which makes June nevertheless the second lowest on record. Some believe the worst of the post-tax-credit slump is over. Numerous believe the high U.S. unemployment rate and foreclosures make the positive news look like nothing.
New home sales increasing doesn’t mean anything
Monday the Commerce Department reported from May to June, the unit annual rate went up 2.36 percent from 267,000 to 330,000. CNBC reports the pace of new home sales in June was nevertheless the second lowest since records began being kept in 1963. However, the percentage increase was the largest increase since May 1980, and partially offset the historic 36.7 percent decline in May. Besides this great increase, it is expected that the U.S. housing market will continue to do poorly all year.
Anything seems to worse with record low mortgage rates
New home sales weren’t as bad as expected, in part because of the lowest mortgage rates on record. Bloomberg reports that low mortgage rates are the only reason why the housing market has is better than it was with the recession that is the worst since 1930. You will find an increasing number of homes without tenants because of the foreclosure rate along with the 10 percent unemployment rate holding individuals back. New home prices are still falling. $ 214,400 has become the new median price for new homes which is a 0.6 percent decrease from last year.
U.S. housing market still makes economic recovery difficult
. Taragana.com reports that the number has gone down 15 percent from where it was before the housing crisis happened. Weak new home sales mean you will find fewer jobs within the construction industry, which has historically driven economic recoveries. The National Association of Home Builders reports that about three jobs a year are generated with $ 90,000 in taxes paid to local and federal officials are created with each and every new home built. The effect is felt across multiple industries.
Further reading
CNBC
cnbc.com/id/38412228
Bloomberg
bloomberg.com/news/2010-07-26/sales-of-u-s-new-houses-climb-to-330-000-more-than-economists-forecasts.html
Taragana.com
blog.taragana.com/business/2010/07/26/new-us-home-sales-in-june-tick-up-slightly-but-remain-low-as-demand-for-housing-slumps-82763/
